On March 2,2014,Glen Industries Purchased a Fleet of Automobiles at a Cost

question 106

Multiple Choice

On March 2,2014,Glen Industries purchased a fleet of automobiles at a cost of $550,000.The cars are to be depreciated by the straight-line method over five years with no salvage value.Glen uses the half-year convention to compute depreciation for fractional periods.The book value of the fleet of automobiles at December 31,2015,will be:

• A)$165,000.
• B)$330,000.
• C)$495,000.
• D)$385,000.

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Definitions:

Adjusting Entries

Bookkeeping records created at the closure of an accounting cycle to distribute revenues and expenses to the timeframe in which they were genuinely incurred.

Onscreen Journal

A digital ledger within accounting software that displays financial transactions in chronological order.

Depreciation

The method of allocating the cost of a tangible asset over its useful life.

Fixed Assets

Long-term tangible assets that are expected to be used in the operation of a business for a length of time, typically over one year.